Monday, November 18, 2013

The early failure of HealthCare.gov and the psychology of a crusade

The early failure of HealthCare.gov, the federal
government’s marketplace exchange for buying health insurance, raises questions
about how and why the Obama administration bungled such an important
undertaking. Some writers suggest that the administration’s leaders did not
appreciate the challenges of designing and implementing a large-scale computer system
that integrated data from different government agencies. Focused primarily on
politics, and skilled in creating legislation, these leaders lacked the requisite
technical imagination and know-how to integrate the efforts of several
contractors and government agencies in an orderly process of software
development and testing. As David Cutler, Harvard professor and health adviser to Obama’s
2008 campaign noted, “They were running the
biggest start-up in the world, and they didn’t have anyone who had run a start-up,
or even run a business. It’s very hard to think of a situation where the people
best at getting legislation passed are best at implementing it. They are a
different set of skills.”

Instead, as the argument goes, the White House’s model for
achieving what were technical objectives was based inappropriately on the
dynamics of a political campaign, where for example, you face enemies, you
focus on appearances and optics, and you value, when necessary, stealth and
secrecy. As two Washington Post journalists wrote, the White House subsumed
“technical needs” to “political fear.” (http://www.washingtonpost.com/politics/challenges-have-dogged-obamas-health-plan-since-2010/2013/11/02/453fba42-426b-11e3-a624-41d661b0bb78_story.html)
And as another writes, the administration managed “a software project as if
it were a top-secret campaign strategy rather than a mission-critical component
of the most ambitious federal entitlement expansion in almost 50 years.”

This frame of reference -- envisioning the
work as political rather than technical -- explains why the 200 member team,
enjoined to build the website, worked in relative secrecy within the Department
of Health and Human Services “insulated from the efforts of House Republicans, who were
looking for ways to undermine the law.” It also explains why the administration took up the role of “general
contractor” rather than rely on a company with expertise in building large-scale
computer systems. Congressional Republicans could readily subpoena contractors
to testify about the difficulties the administration team faced.It also explains why the White House did not
permit the early release of a high level design for the exchanges that would
have helped government contractors do their work. The White House worried that
Republicans would mock the design’s seeming complexity, just as they had ridiculed
the diagram Hillary Clinton’s team had used when describing its plan for overhauling health care
some twenty years ago. It also explains why the team did not tell contractors
how many states they expected would create their own complementary websites- a critical
specification for the federal website design. The administration leaders worried,
that were the number too low, it would signal that the federal government was
taking over health care, just as the Republicans had predicted.

Ironically, White House officials and
administrative leaders took these decisions even though, as another journalist
writes, “hours
after the bill had been enacted, the president had stood on the Truman Balcony
for a champagne toast with his weary staff and put them on notice: They needed
to get started on carrying out the law the very next morning.” At subsequent
meetings for monitoring the progress of enacting the law, “no matter which
aspects of the sprawling law had been that day’s focus,” an administration
official said, “Obama invariably ended the meeting by saying, ‘All of that is
well and good, but if the website doesn’t work, nothing else matters.’” Yet as another insider, Donald Berwick noted,
“The
exchange ‘was in the future,’ explaining that the Web site was, during his tenure,
a matter of ‘conceptualization,’ along with ‘the many other regulations we were
batting out.’” The question is why did the administration make this fate-making
choice of treating their effort as a political campaign.

One reasonable answer is
that the administration framed its efforts as a political campaign because it faced
an ongoing political war with the Republicans over the law’s implementation. In
this way of thinking, the Republicans who hated Obamacare were sabotaging the
administration’s efforts. For example, all the Republican governors refused to
build state-level web sites, which once put into place, would have reduced the technical
complexity of building a federal web site. In addition, many Republican
governors refused to expand Medicaid, as allowed under the law, which would
have reduced the number of people using the federal exchange to purchase
insurance. Similarly, “Although the statute provided plenty of money to help
states build their own insurance exchanges, it included no money for the
development of a federal exchange — and Republicans would block any funding
attempts.”

Similarly, as one journalist
notes, “In August, the Obama administration announced that it had awarded
contracts to 105 ‘navigators’ to help guide people through their new
predicaments and options. There were local health-care providers, community
groups, Planned Parenthood outposts, and even business groups. In at least 17 states where Republicans are in charge,
a variety of roadblocks have been thrown in front of these folks. In Indiana,
they were required to pay fees of $175. In Florida, the health department ruled
that local public-health offices can’t have navigators on their premises… Tennessee
issued ‘emergency rules’ requiring their employees to be fingerprinted and
undergo background checks. America, 2013: No background checks to buy assault
weapons. But you damn well better not try to enroll someone in health care.” In
short, the White House was at war and as another journalist writes, “sabotage
works.”

But this explanation is
insufficient because many people involved in the administration’s effort, or
who were close to the White House, worried that the administration’s own efforts, resources
and skills were insufficient to the task at hand. As the two Washington Post journalists
write, “In May 2010, two months after the Affordable Care Act squeaked through
Congress, President Obama’s top economic aides were getting worried. Larry Summers,
director of the White House’s National Economic Council, and Peter Orszag, head
of the Office of Management and Budget, had just received a pointed four-page
memo from David Cutler, the trusted outside health adviser from Harvard. It
warned that no one in the administration was ‘up to the task’ of overseeing the
construction of an insurance exchange and other intricacies of translating the 2,000-page
statute into reality. After the (2012) election, Cutler, renewed his warnings
that the White House had not put the right people in charge. “I said, ‘You have
another chance to get a team in place,’” he recalled.

Similarly, in March,
“Henry Chao, deputy chief information officer at the lead Obamacare agency,
said at an insurance-industry meeting that he was "pretty nervous"
about the exchanges being ready by Oct. 1, adding, "let's just make sure
it's not a third-world experience." In addition, as another journalist
writes, “by early this year, people inside and outside the bureaucracy were
raising red flags. ‘We foresee a train wreck,’ an insurance executive working
on information technology said in a February interview. ‘We don’t have the I.T.
specifications. The level of angst in health plans is growing by leaps and
bounds. The political people in the administration do not understand how far
behind they are.’”

One
question is why the White House and top administration officials did not pay
sufficient attention to these warnings and anxieities. Let me suggest the
following hypothesis. The notion that the administration was waging a political
campaign is not quite right, or rather not sufficient. Rather, it was waging a crusade. The psychology of a crusade can
stimulate unrealistic and wishful thinking.

Consider
the following. In remarks on the Sunday after the legislation passed, with
every House Republican voting no, Obama said that the vote "proved that we are
still capable of doing big things. We proved that this government -- a
government of the people and by the people -- still works for the people."
The phrase, “of the people, and by the people,” evokes of course Abraham
Lincoln’s magisterial speech at Gettysburg during the Civil War. Moreover, it
is a phrase embedded deeply in the consciousness of Americans, evoking as it
does the great moral struggle against slavery. Indeed, one pro-Obama journalist
invoked the Civil War in characterizing Republican opposition to the Affordable
Health Care act. He writes, “To find obstinacy like this, you have to go back, yes, to
the pre-Civil War era. The tariff of 1828, the Kansas-Nebraska Act, which led
to the Civil War in ‘Bloody Kansas’ and ultimately to the Civil War itself.” In
this sense passing the Affordable Health Care Act was like winning the war against slavery.

This
sense of a crusade was buttressed I suggest by Senator Ted Kennedy’s death, eight
months after Obama first took office. He was the last of the great “liberal lions”
whose consciousness was shaped by the idea of the welfare state that first took
shape under the leadership of President Franklin Roosevelt and his “New Deal.” He
had been a passionate advocate for public health care insurance throughout his political
career. But he was too sick with cancer to participate in the early
congressional debates over health care legislation. Ironically, his death led
to the election of a Republican senator, Scott Brown from Massachusetts, who
campaigned against Obamas’ health
care act.

Perhaps many of my readers can recall, that upon the passage of the
law, Democratic Party supporters expressed a sense of poignancy as well as vindication.
It was as if Obama had given the dead Ted Kennedy a parting gift, while the law
proved that Kennedy had not died in vein. In this sense, Obama, in evoking
Lincoln, was also positioning himself in the line of presidents -- Roosevelt,
Truman, Kennedy, Johnson-- who had successfully advanced the welfare state in
the face of Republicans who identified the welfare state with socialism. After
all, Ronald Reagan had warned conservatives in 1961 that if Medicare, the law
that now helps pay for medical services for old people, were passed into law,
“One of these days you and I are going to spend our sunset years telling our
children and our children’s children what it once was like in America when men
were free.”

If
this line of thinking is useful it suggests that we examine the psychology of a
crusade. I suggest that it has the following three features. First, the crusade
is propelled by a moral imagination. What matters most is not whether a
particular assessment or assumption is true or false, but rather whether it is
good or bad. Under these conditions, considerations of technique and the
assessment of cause and effect take a back seat. Moreover, in such a setting,
expressions of doubt or misgiving can themselves be labeled as immoral or
disloyal. Second, it is a common and even right that a crusade should unfold in
the face of trenchant opposition. Indeed the opposition underlines the moral
superiority of the crusaders. Third, the crusade minimizes the emotional
meaning of setbacks. Failures reinforce the idea that the crusade is necessary,
since the strength of opposition and the impact of obstacles are signs of the
crusade’s moral standing.

This frame of reference
helps explain how and why the administration undermined its own efforts. It saw
the Republicans as morally flawed, in this way discounting its dependence on
the Republicans to implement the legislation. In fact, the Affordable Health Care
Act was the only major piece of legislation to pass in the face of total
opposition from the Republicans in the past 80 years. Medicare, the Voting
Rights act, Social Security, and the Civil Rights act all passed with some
Republican support. Any law as complex as these laws were, and the Affordable
Care Act was certainly complex, depends on some bipartisan support for its
implementation.

For example, had some
number of Republicans voted for the law, the Democrats could have secured the
passage of supporting legislation to actually fund the implementation of the federal
website. Instead, Republicans made it clear that they would such block funding. As
the Washington Post journalists point out, this had very serious consequences.
Kathleen Sebelius, the Health and Human Services Secretary, “could not
scrounge together enough money to keep a group of people developing the
exchanges working directly under her.” Instead, the technical people were
seconded to one agency, the policy people to another.They go on write, “Bureaucratic as this
move may sound, it was fateful, according to current and former administration
officials. It meant that the work of designing the federal health exchange —
and of helping states that wanted to build their own — became fragmented.
Technical staffs, for instance, were separated from those assigned to write the
necessary policies and regulations… There wasn’t a person who said, ‘My job is
the seamless implementation of the Affordable Care Act.’” In other words,
because the administration was leading a crusade it failed to account for the
impact that opposition would have on its practical ability to implement the
legislation.

This frame of reference
also helps explain why the White House ignored David Cutler’s prescient
warnings, the first written while the Democrats still controlled both houses.
To respond to his memo the administration had to confront the difficult
technical issues they faced. But a technical imagination stands at right angles
to a moral one. It privileges the means over the ends, usefulness over meaning and being effective over being right. It sees the objective links between cause
and effect as dispositive and failure as natural. This is why software-system
implementers rely so heavily on stress testing their designs. This distinction helps explain Obama’s serious misjudgment in appointing Nancy-Ann De-Parle
the director of the White House Office of Health Reform and a policy
specialist, to be in charge of the law’s arduous implementation. Since the day
the bill became law, the president believed that, “if you
were to design a person in the lab to implement health care, it would be
Nancy-Ann.” Ironically De-Parle recognized her own limitations and tried but
failed to recruit to the White House “one of the nation’s top experts, Jon
Kingsdale, who had overseen the building of a similar insurance exchange in
Massachusetts.”

In addition, this
concept of a crusade, where loyalty is favored over critical thinking, can help
explain why people involved in the administration’s efforts were reluctant to
express their anxieties and doubts. As the Washington Post journalists write, “On
Sept. 5, White House officials visited CMS for a final demonstration of HealthCare.gov.
Some staff members worried that it would fail right in front of the president’s
aides. A few secretly rooted for it to fail so that perhaps the White House
would wait to open the exchange until it was ready.” In other words, they
withheld their doubts, secretly rooting for failure as they only way in which
their doubts could then be justified.

Finally, if you lead a
crusade, you may paradoxically underestimate your opposition because you
believe that your effort’s moral meaning should help you ultimately overcome
all obstacles. This conception helps explain why in the face of implacable Republican
hatred for the law, the White House still imagined or hoped that after the 2012
election Republication governors would decide to collaborate with the
administration by implementing state-level exchanges. This was one reason why the
administration risked releasing the exchange’s specifications to the contractors
who were to build it, without specifying how many states would or would not
create their own exchanges. As the Washington Post journalists write, “After
the contract was awarded to CGI Federal, the administration kept giving states
more and more time to decide whether to build their own exchanges. White House
officials hoped that more would become willing after the 2012 election. So the
technical work was held up. ‘The dynamic was you’d have [CMS’s leaders] going
to the White House saying, ‘We’ve got to get this process going,’ one former official
recalled. ‘There would be pushback from the White House.’”

It seems strange that,
experiencing Republican hatred for the law, and feeling that they were working
in a war zone, the White House
would risk assuming that their Republican opposition would weaken significantly.
One hypothesis is that the White House most feared the voting public rather
than the Republicans.In this sense,
they could interpret Obama’s election potential victory as a signal that voters
would now support the health care law and put pressure on their Republican
representatives. In this context, it is striking that from 2010 to 2012 public
approval for the Affordable Health Care Act never rose above 45%.

This hypothesis helps explain
Obama’s personal failing of promising Americans that they could keep their current
health policies after the law was passed. In fact millions had their plans
cancelled because their policies did not meet the standards set by the new law.
Speaking after many plans were cancelled, the White House spokesman, Jay
Carney, told reporters, “What the
president said and what everybody said all along is that there are going to be
changes brought about by the Affordable Care Act to create minimum standards of
coverage, minimum services that every insurance plan has to provide. So it's
true that there are existing healthcare plans on the individual market that
don't meet those minimum standards and therefore do not qualify for the
Affordable Care Act.”

This response appears evasive and suggests that Obama’s
original promise was itself an act of evasion, the hope being that people would
welcome the opportunity to buy better policies once they qualified for
subsidies. In this way of thinking, his promise, “You can keep your policy,” was an evasive
version of the statement, “You will get a better policy, when you lose your old
one.” We give evasive answers when we are afraid that the truth will offend
someone on whom we depend. This fear also explains why the administration
decided that consumers shopping for a policy had to first enroll to determine
if they were entitled to a subsidy and if so how much. As many commentators
noted this meant that the website “engine” had to successfully integrate
databases from different agencies and organizations, for example, the Internal
Revenue Service, the state Medicaid agency and an insurance company. As one
blogger writes, “The
real problems are with the back-end of the software. When you try to get a
quote for health insurance, the system has to connect to computers at the IRS,
the VA, Medicaid/CHIP, various state agencies, Treasury, and HHS. They also
have to connect to all the health plan carriers to get pre-subsidy pricing. All
of these queries receive data that is then fed into the online calculator to
give you a price. If any of these queries fails, the whole transaction fails.”

As a result, when users tried to
enroll, they burdened the computer system’s ability to query and integrate all of
these back-end databases. That is one reason why the website crashed frequently. Yet
the website could have provided useful information, and an initial level of
service, if consumers could have shopped for plans without first enrolling. But
the administration feared that upon seeing the prices for these plans, without
first knowing what subsidy they would be entitled to, users would be angry and
quit the website.

If I am right, that the
administration saw its efforts as part of an historical crusade to expand the
welfare state, there is a certain irony in their achievement. The best exemplar
of the welfare state would have been a law that enabled consumers to get
insurance directly from the Federal government, much as senior citizens do
today when they enroll in Medicare. But the Obama administration ruled out what
was called “the public option” as simply being too radical and therefore
unacceptable to Republicans and their supporters. Instead, taking a brief from
earlier work by conservative policy analysts, they embraced a marketplace
exchange, on the unrealized hope that Republicans would support a social policy
that relied on market mechanisms. This is one more sign that they failed to
anticipate or understand Republican hatred of the law. The result is a jerry-rigged
marketplace mechanism for providing insurance, which as we have seen, has
proven difficult to set up and implement. Had the administration recognized the
meaning of their compromise, they might have realized that their crusade had
been compromised as well, and that they were best served by looking upon their
efforts pragmatically.

Such a pragmatic perspective might have
reinforced a reality orientation, helping the White House and administration
leaders focus their attention on the technical challenges of building the
front-end website and its back-end engine. In this sense, I part company with the
Washington Post journalists, who wrote that the website’s failure signals that
the administration had subsumed "technical requirements to political fear." The
larger failing was to see the passage of the law through the lens of
grandiosity. It was this grandiosity that led them to imagine that the
opposition would melt away, that they could subvert the public’s anxieties
and animosities through evasion and that technical problems could be solved without focused expertise.

One remaining question, stimulated by the comments of my colleague Jim Krantz, is what is the root of the grandiosity? The "psychodynamics of organizations" as a school of thought suggests that organizations erect "social defenses" to stave off or suppress the anxiety stimulated by the work organization members are called upon to do. Perhaps administration officials felt anxious because they in fact feared that the citizen/voter would hate Obamacare, much as they had hated the earlier appearance of "managed care" in the 1990s. In this context the grandiosity could be seen as a protective myth, a way of believing in the law's inevitability and its essential goodness, even if many citizens hated it. But just as an individual's psychological defense masks a truth, and may lead to self-inflicted wounds, for example through "acting out," the White House acted out, thereby undermining its own efforts.

9 comments:

As a former US Government contractor I can testify that contractual requirements on bidding and cost are virtually independent of policy. That the ACA was a sausage ground out by the Senate (Baucus, et al) reflects the White House hands off based on the travesty of HillaryCare. A single payer system -- expansion of Medicare, say -- was the most logical way to go, but would have been dead on arrival. Perhaps the roll out of the program could have been delayed, but in the micro-climate of Washington politics and reportage, that might also have proved fatal.

I like this very much, but I think you should follow your crusade analogy just a bit farther. The Crusades not only encountered opposition from the Muslim infidels, they were wars against those infidels, seen as forces of evil. It might be useful to consider the ACA, by analogy, as a war against the evil Republicans.

That may not be as far-fetched as it sounds. For one thing, a massive social and economic transformation of this sort necessarily shifts the concentration of power. In that sense, the program may be considered a drive for increased power. And at whose expense would this increase be gained, if not those evil Republicans?

For another thing, it seems to me that many, if not most, of the Democrats see the Republicans as the party, if not exactly of top-hatted plutocrats, then certainly of the rich, who are seen as having gained their wealth at the expense of the poor. In that sense, the subsidies for the poor and lower middle class that were supposed to make health insurance affordable for them, and which would have to be paid by those who were charged full price, could be seen as a program of wealth redistribution, with all the implications that has for the distribution of power.

If the ACA were conceived as a war against evil Republicans, that would help to explain why the Republicans were frozen out of the process; an exclusion we can now understand as really, really dumb, if not fatal. It might also help to explain why the Republicans, as you rightly note, hated the ACA.

Of course, the people hated it, too. I'll refrain from pursuing the analogy of the Crusades in that direction.

Howie, thank you for your reflections. If I understand the mechanics of insurance correctly, a major source of redistribution is from the healthy to the sick. But this is known as community rating and has been used forever when large employers buy insurance on behalf of their employees. There is a moral idea here worth upholding, that illness can strike any of us, so as a matter of solidarity we should help one another recover from illness. The problem with the Republicans has been that they have provided few if any alternatives, in part because I think their moral vision concerning health care is underdeveloped. The moral idea that the government should not stand between the patient and the provider is not compelling, at least for me, because today so much institutional structure, for example hospitals, regulations to secure patient safety, and insurance companies already stands between the two. Health care is a deeply regulated industry as is. So the legitimate question is, what kind of regulations?

Great blog, Larry. I've been absolutely bewildered by the extraordinary incompetence of this whole thing. If there ever was an illustration of Basic Assumption Life on a large scale, this is it. Some of your ideas about the underlying fantasy situation - and the unbelievably bad decision making that resulted, make a lot of sense to me.

Jim your reference to Basic Assumption Life points to an additional dimension of this case. We could say that the primary anxiety facing the administration was based on the fear that the consumers/voters would reject the health car law even after its passage. If true then we could look upon the crusader as a social defense against this anxiety. It would have functioned a protective myth assuring the administration that even if the face of hatred for the law they were on the right course.

There are two kinds of subsidization in the ACA; the subsidy according to health, which is the one you refer to, and the subsidy according to income, whose principle has nothing to do with the first, although the two may be related as an empirical matter.

As far as the legitimacy of the first kind is concerned, I think your arguments make sense in the abstract, but abstractions about the proper role of government depend on assumptions about the powers of government that are codified in the law. When a government no longer feels bound by the law, those abstractions no longer apply. The Republican position has always been that this law puts too much power in the hands of government. Those skeptical considerations have up until now also been based on abstractions, but then the present government showed up and revealed their meaning.

How can anyone not be concerned at the fact that thousands of "navigators" have been hired, without even checks on their criminal background, from "community organizations" and, with very little training given access to our most vital information? This from the same government that set the IRS to deep-six the tax exemption applications of conservative groups before the election. It seems to me that we are beyond the range where abstract considerations have much application. We are not, as the saying goes, in Kansas anymore.

Regarding the Republican approach to health care, in fact they did have programs, based on the principle of amending the structure we have had. Unfortunately, these were not taken seriously by the press, which, in place of serious commentary, published cartoons of the Republicans pushing granny, in her wheelchair, over a cliff.

The Republican proposals, as I understand them, were based on two sets of considerations. One was Hayekian economics, the other was a concern for the dangers of concentration of power in government, which I referred to above. I'm not sure I see either of these as indicators of moral underdevelopment. It is not as if the moral superiority of economic and political centralization can be taken for granted. Sad to say, this only becomes truly apparent after these powers have already been hijacked.

Took me time to read all the comments, but I really enjoyed the article. It proved to be Very helpful to me and I am sure to all the commentates here! It’s always nice when you can not only be informed, but also entertained!Enrolment

About Me

Married with two grown children. An Owner and a founder of CFAR, a management consulting firm. (www.cfar.com) Love to write. Compose poems for friends. Teach part time at the University of Pennsylvania and Fielding Graduate University. Wife is a psychologist. Own cottages on a wonderful wilderness lake (www.bobslake.com)